The Inside Story of Accountancy & Finance in Malaysia

The Inside Story of Accountancy & Finance in Malaysia

When the shared service centre (SSC) boom first hit Malaysia around the turn of the century, few could have predicted that it would continue to be a major economic driver nearly twenty years later. Yet, a glance at the AT Kearney Offshore Location Attractiveness Index of 2017 shows Malaysia as the third most popular SSC destination outside Mainland China and India, a position that it has held since the rankings began in 2004.

Though initially principally focused on manufacturing, the recent trend in the SSC industry is for financial shared service centres (FSSC), with the likes of HSBC, AIA Group and Standard Chartered all opening – and later expanding – centres in Malaysia.

This development of the sector saw a remarkable upswing in 2017, and as predicted by the Hays Salary Guide, 2018 is seeing it grow even further. The proliferation of the financial shared services sector is having such a profound affect that it has become one of the fastest growing sectors in Malaysia, with more than 400 global business services and FFS companies based in Malaysia, employing over 70,000 people.

From low labour costs to a workforce that is multi-lingual – speaking English, Malay, Cantonese and Mandarin – there are of course a number of reasons why FSSCs have become the predominant focus in Malaysia’s Accountancy & Finance industry, and why so many global companies are attracted to them. But it is the fact that the workforce is made up of such a high number of certified finance professionals that is perhaps the greatest enticement, as not only are the services provided of a high quality, but it also means that the companies can expect more diverse and complex functions be undertaken, a shift towards which has been seen more and more in the last 12 months.

“There’s an increasing move of transactional activities to the FSS so that the finance team can focus on more value-added activities,” noted AGOS Asia Chief Executive Officer, Teoh Joon Leng, prior to April’s Finance Transformation & Shared Services Conference. “In that migration from the finance team to the FSS team, there are processes to note to ease the migration and avoid some common pitfalls like miscommunication.”

The way in which FSSCs have diversified can be seen in how they now offer a wider range of finance functions, particularly for operational or finance execution roles such as accounts payable, accounts receivable, and general ledger with companies looking to utilise centres for financial analysis and planning functions, budgeting and forecasting. These positions are available at all levels of seniority, including managers, team leaders and executives.

According to the State of the Shared Services and Outsourcing Industry Malaysian Market Report 2018, “never before (has the SSC industry) experienced such extraordinary shifts in scope, value, and capability as over the past 18 months. This shift has been driven by nothing less than a fourth iteration of the industrial revolution based on robotic automation, but now, moving from manufacturing into services.”

With the financial shared service industry being particularly process driven and service level agreement heavy, robotic process automation (RPA) is increasingly seen as a way of reducing delivery times and cutting back on processes and operations traditionally performed by humans. Spearheading this movement are banks and financial service organisations, apparently keen on making the potential 600 to 800 per cent return on investment that someinformed observers quote that RPA can provide.

With this potential for cost cutting allied to the advantages that FSSCs can offer companies, it is no surprise that the sector is growing, and it is especially crucial to the Malaysian economy. As a result, the government is driving the industry to even further heights by partnering its MDEC agency with Hays in order to present to multi-nationals the advantages of opening FSSCs in the country, a tactic that has proved successful in the past 12 months.

Despite this success, following the surge of a dramatic election, Malaysia saw a slight slowdown in the economy during the second quarter, with GDP at 4.4 per cent. However, there is a distinct feeling that this is a blip as opposed to a trend, with the Asian Development Bank maintaining its economic growth outlook for Malaysia at 5.3% for 2018, and the Bank Negara Malaysia governor Nor Shamsiah Mohd Yunus confident that Malaysia would keep growing, supported by favourable labour-market conditions and sustained global growth.

Another factor that is adding to this economic confidence is the progression seen in the manufacturing sector, which along with the services centre industry, is amongst the nation’s primary drivers. As a result, the next 12 months is likely to continue the trend for manufacturing companies to augment Accountancy & Finance departments, leading to a demand for candidates to operate in the area, with finance managers and finance controllers very much in the key hiring demographic.

An additional reflection of this positivity is in how buoyant the recruitment market remains. Once the heightened hiring activity that follows the pay-out of bonuses has subsided, traditionally the market tends to slow down, as budgets reach their limits. However, 2018 is bucking the trend, with companies still looking to recruit. Candidates who are feeling confident in this post-bonus continuance are finding that they are able to command salary increases of 15 to 20 per cent as well as perhaps finding improved working environments, with some companies offering more flexible working conditions.

But one requirement for candidates looking to improve their standing is that they hold certification. As previously mentioned, the Malaysian Accountancy & Finance workforce are well qualified, with perhaps 60 to 70 percent of accountants certified. The remainder are finding that, even if they have performed well in previous positions, sometimes at prestigious companies, employers are expecting that they undertake the required accreditations. Fortunately candidates seem amenable to this, often undergoing the studies for themselves, or with a government initiative, designed to boost the number of qualified accountants, that is recording impressive results.

In a country that is looking onwards and upwards to the future, there is a pronounced feeling of confidence within Malaysia, a major part of which can be related to the Accountancy & Finance industry. From growing departments in the critical manufacturing sector to the shared service centres that are driving the economy, the coming year is looking as bright for the industry as the country itself.

If you would like to discuss this report in more depth or you wish to discuss your job search or recruitment needs, please email Aaron Chen, Senior Manager for Hays Malaysia at Aaron.Chen@hays.com.my